11:12 AM
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Clint Eastwood playing "Dirty Harry" warns, "A man's got to know his limitations." This advice is particularly appropriate for financial planners and advisors who are giving advice beyond their expertise. Though I am biased because I have over 27 years of technical expertise in the IRA and retirement plan area, the lack of knowledge in this area can cost clients hundreds of thousands or even millions of dollars.
There are a few things to consider when you are planning for old age. You have to reach a decision with regard to the income you will need in order to live a comfortable life as a retiree. You should take into account the medical expenses and vacations that you will have while reducing costs such as your child's education and rental fees if you own a house at the same time. You should also determine the amount you need to regularly save at this very moment in order to reach your goal. In case you do not have enough yet, you can start small with what you have at the moment. It will also benefit you to select the plan that will help you achieve your requirements. Also, it is advisable for you to invest a certain amount of money on a monthly basis in order to enjoy a healthy life as a retiree. Lastly, start saving money now. This will be one of the best suggestions that you will ever get in your life.
For example one advisor had both a father and son as clients. The father died leaving his IRA to his son. The advisor promptly transferred the IRA from the father's name to the son's name? Sounds o.k. to you? But it isn't o.k. If you transfer an inherited IRA to a non-spouse beneficiary without a special designation like "inherited IRA of Dad for the benefit of Son" you cause immediate income tax acceleration for the IRA beneficiary. So rather than having the ability to stretch an IRA or defer taxes for forty years, the son had to pay the taxes on the entire IRA distribution the year after his father died. Using reasonable assumptions, this mistake cost the son one million dollars over his lifetime.
All these things would look and sound challenging but there are financial planners that could assist you in achieving your plans. These professionals can prepare financial planning for folks covering various features of personal finance. It is indeed hard to manage all these things by ourselves since we are also busy working and dealing with other concerns in our lives. Good thing that there are experts that can show us the pros and cons within our plans and make adjustments to fit our needs. They determine all our financial goals by listening to our priorities and purposes in life as well as the other essential factors of our personal lives to aid us in obtaining what we desire in the future.
Neither of these advisors is a bad person. As far as I know they might be wonderful spouses and loving parents. In fact, they could even be excellent money managers or product experts who have given excellent investment advice to hundreds of their clients. Where they failed, however, is not taking the time to become educated about IRAs and retirement plans or not seeking any additional help when they were confronted with issues related to IRAs and retirement plans.It also grieves me to say that these types of mistakes are all too common and that terrible advice regarding IRAs and retirement plans is routinely provided to millions of clients.Avoid These Costly IRA & Retirement Planning Mistakes - Do Your Research.If you are an advisor reading this, my suggestion, would be to read, study and attend some good seminars that will bring you up to speed on IRAs, Roth IRAs, and other retirement plans--with good information you can really add value for your clients. Excellent sources for information include books by Seymour Goldberg, Ed Slott, Robert Keebler, Natalie Choate, Gregory Kolojeski, and of course my own book Retire Secure!.
You see, everyone is so sketchy with their personal information, and so busy hiding everything so that it won't get stolen from identity thieves, hackers, or the next fraudulent scam artist that they don't always give the financial planner all the information they need to make a competent decision and come up with a workable strategy. Of course, you cannot do retirement planning unless you ask all the questions, and those questions must be answered by the client truthfully and honestly. If not, everyone is wasting their time and it would be impossible to come up with the best possible plan.
Is amazing how many questions a retirement planning consultant, or financial planner must ask these days to comply with all the federal and state requirements. There are what they call; "know your customer laws," and therefore the practitioner must ask all the questions and fill out all the forms. Then there are the questions that the retirement customer asks. Sometimes they are silly things such as; "should I be buying gold?"Another challenge that retirement planners and financial consultants must deal with is that they generally work for a larger firm that also has rules to stay out of hot water with the SEC and consumer protection agencies. Often this can get in the way of asset allocation when a given client wants to play it safe for their retirement, and then gets some wild hair up their rear end to go and make a silly and non-prudent financial investment decision on their own.
So what should you expect out of a retirement planner? According to Investopedia, a retirement planner is "A practicing professional who helps individuals prepare a retirement plan." That's pretty straight forward. Two certifications to look for are the Certified Financial Planner (CFP) and the Chartered Financial Analyst (CFA). The CFP certification requires a college degree, passing a 10 hr exam, 3 years of experience in the financial planning field and an extensive background check. The CFA requires a bachelors degree, passing 3 6 hr tests and 4 years of work experience.Baron's recently published an article identifying the top financial advisors for 2010. When looking at which companies held the top spot for each of the states the outcome was as follows:Merrill Lynch (Top position in 20 states) Morgan Stanley Smith Barney (Top position in 7 states) Wells Fargo (Top position in 6 states) UBS (Top position in 5 states) Raymond James (Top position in 2 states).So if you want the help of a reputable retirement planner you can't go wrong with any of these companies. Alternatively, if you don't need such high-end advice then look for a local advisor with the right certifications and check as many references as you can.By the way, don't forget to sign up for those retirement club benefits. Even if you don't want to admit you're getting old those grey hairs can get you some serious discounts!
There are a few things to consider when you are planning for old age. You have to reach a decision with regard to the income you will need in order to live a comfortable life as a retiree. You should take into account the medical expenses and vacations that you will have while reducing costs such as your child's education and rental fees if you own a house at the same time. You should also determine the amount you need to regularly save at this very moment in order to reach your goal. In case you do not have enough yet, you can start small with what you have at the moment. It will also benefit you to select the plan that will help you achieve your requirements. Also, it is advisable for you to invest a certain amount of money on a monthly basis in order to enjoy a healthy life as a retiree. Lastly, start saving money now. This will be one of the best suggestions that you will ever get in your life.
For example one advisor had both a father and son as clients. The father died leaving his IRA to his son. The advisor promptly transferred the IRA from the father's name to the son's name? Sounds o.k. to you? But it isn't o.k. If you transfer an inherited IRA to a non-spouse beneficiary without a special designation like "inherited IRA of Dad for the benefit of Son" you cause immediate income tax acceleration for the IRA beneficiary. So rather than having the ability to stretch an IRA or defer taxes for forty years, the son had to pay the taxes on the entire IRA distribution the year after his father died. Using reasonable assumptions, this mistake cost the son one million dollars over his lifetime.
All these things would look and sound challenging but there are financial planners that could assist you in achieving your plans. These professionals can prepare financial planning for folks covering various features of personal finance. It is indeed hard to manage all these things by ourselves since we are also busy working and dealing with other concerns in our lives. Good thing that there are experts that can show us the pros and cons within our plans and make adjustments to fit our needs. They determine all our financial goals by listening to our priorities and purposes in life as well as the other essential factors of our personal lives to aid us in obtaining what we desire in the future.
Neither of these advisors is a bad person. As far as I know they might be wonderful spouses and loving parents. In fact, they could even be excellent money managers or product experts who have given excellent investment advice to hundreds of their clients. Where they failed, however, is not taking the time to become educated about IRAs and retirement plans or not seeking any additional help when they were confronted with issues related to IRAs and retirement plans.It also grieves me to say that these types of mistakes are all too common and that terrible advice regarding IRAs and retirement plans is routinely provided to millions of clients.Avoid These Costly IRA & Retirement Planning Mistakes - Do Your Research.If you are an advisor reading this, my suggestion, would be to read, study and attend some good seminars that will bring you up to speed on IRAs, Roth IRAs, and other retirement plans--with good information you can really add value for your clients. Excellent sources for information include books by Seymour Goldberg, Ed Slott, Robert Keebler, Natalie Choate, Gregory Kolojeski, and of course my own book Retire Secure!.
You see, everyone is so sketchy with their personal information, and so busy hiding everything so that it won't get stolen from identity thieves, hackers, or the next fraudulent scam artist that they don't always give the financial planner all the information they need to make a competent decision and come up with a workable strategy. Of course, you cannot do retirement planning unless you ask all the questions, and those questions must be answered by the client truthfully and honestly. If not, everyone is wasting their time and it would be impossible to come up with the best possible plan.
Is amazing how many questions a retirement planning consultant, or financial planner must ask these days to comply with all the federal and state requirements. There are what they call; "know your customer laws," and therefore the practitioner must ask all the questions and fill out all the forms. Then there are the questions that the retirement customer asks. Sometimes they are silly things such as; "should I be buying gold?"Another challenge that retirement planners and financial consultants must deal with is that they generally work for a larger firm that also has rules to stay out of hot water with the SEC and consumer protection agencies. Often this can get in the way of asset allocation when a given client wants to play it safe for their retirement, and then gets some wild hair up their rear end to go and make a silly and non-prudent financial investment decision on their own.
So what should you expect out of a retirement planner? According to Investopedia, a retirement planner is "A practicing professional who helps individuals prepare a retirement plan." That's pretty straight forward. Two certifications to look for are the Certified Financial Planner (CFP) and the Chartered Financial Analyst (CFA). The CFP certification requires a college degree, passing a 10 hr exam, 3 years of experience in the financial planning field and an extensive background check. The CFA requires a bachelors degree, passing 3 6 hr tests and 4 years of work experience.Baron's recently published an article identifying the top financial advisors for 2010. When looking at which companies held the top spot for each of the states the outcome was as follows:Merrill Lynch (Top position in 20 states) Morgan Stanley Smith Barney (Top position in 7 states) Wells Fargo (Top position in 6 states) UBS (Top position in 5 states) Raymond James (Top position in 2 states).So if you want the help of a reputable retirement planner you can't go wrong with any of these companies. Alternatively, if you don't need such high-end advice then look for a local advisor with the right certifications and check as many references as you can.By the way, don't forget to sign up for those retirement club benefits. Even if you don't want to admit you're getting old those grey hairs can get you some serious discounts!
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